Employee Benefit Systems, Inc.

ebs financial group
6511-C Basile Rowe — East Syracuse, NY 13057

September 16, 2015

Office of Regulations and Interpretations
Office of Exemption Determinations
Employee Benefits Security Administration
Attn: Conflict of Interest Rule

Room N-5655 and Suite 400

U.S. Department of Labor

200 Constitution Avenue NW
Washington, D.C. 20210

RE: Conflict of Interest Rule
Dear Mr. Perez,

| have hesitated to comment so far on the proposed new fiduciary rules. But the
more | read and knowing that this is the last time to comment, | have decided to
go on record.

First, | am not a broker/dealer. | am affiliated and contracted as a Registered
Representative with the Cadaret Grant broker/dealer. | am not a RIA (Registered
Investment Advisor), but do provide RIA type services through my broker/dealer
as an IAR (Investment Advisor Representative).

What | am is an owner of a TPA (Third Party Administration) firm and investment
advisor to defined contribution plans. | started my firm 24+ years ago saying
that | was not allowed to be a fiduciary but would always act as if | was a
fiduciary. | receive commissions and/or fees depending upon each specific
plan’s contract for services, but never both. In some instances my TPA firm may
receive revenue sharing from those few retirement plan platforms that we may
use.

While | oppose your undertaking, | do not oppose the goal. But let me focus on
two aspects of the proposed rule specifically - retirement plan to IRA rollovers
and participant education.

Telephone: (315) 432-5522 Facsimile: (315) 432-5468
E-mail: bermanj@ae.cadaretgrant.com

Jeffry A, Berman is a Registered Representative offering securities through Cadaret Grant & Co., Inc., Member FINRA/SIPC.
Employee Benefit Systems, Inc., ebs financial group and Cadaret Grant are separate entities.


Employee Benefits Security Administration September 16, 2015
Page -2-

First, while a plan participant is saving money as in a 401(k) plan, they are
hopefully speaking with a knowledgeable advisor. Assuming so, and assuming
that participant has built a positive/constructive relationship with that advisor,
then why wouldn’t those same investments still be good for the person when
he/she leaves that employer’s plan? The answer is they would.

In my office the standard procedure is to convert the account to an IRA ‘in-kind.’
That means the participant has the same funds at NO cost. And do you know
that an A-share expense ratio for an IRA is less expensive than an R-share
expense ratio inside a retirement plan? In other words today you own a fund
inside the 401(k) account as an R-share and tomorrow you own that same fund
as a less expensive A-share at NAV (Net Asset Value). | as the advisor collect a
lower trail commission in the A-share, but the relationship between me and the
investor remains intact. Under the proposed rules that plan participant will have
to go find a new advisor/broker with whom he/she has no relationship nor
understanding and hope any advice received is the best for them.

Second, advising plan participants. My contracts with plan sponsors includes
meeting with participants either quarterly or semi-annually. Anything less often
and | am not interested. We always discuss the economy maybe including the
Federal Reserve actions, what Congress and EBSA is doing and/or considering,
the European Central Bank and Eurozone, and lastly the markets in general. We
may suggest growth funds over value funds or bonds as versus equities. We are
after all hired to “advise.”

Please tell me how what we do is wrong for the plan participant? Please tell me
how what we do is not in the best interest of the participant? Your proposed rule
will end that practice. How can that possibly benefit the participant?